Dallas Morning News – The Securities and Exchange Commission has accused Dallas hedge fund manager Edwin Buchanan “Bucky” Lyon IV of earning $6.5 million through illegal trades of shares purchased inprivate offerings.
Mr. Lyon, his Dallas-based Gryphon Master Fund and three related funds violated rules for private investments in public equities, or PIPEs, the SEC said in a lawsuit filed this week in federal court in New York.
Mr. Lyon, 40, used shares bought in at least 35 PIPE offerings in short sales, a practice barred by securities laws, and engaged in insider trading, the complaint said.
Mr. Lyon is the first hedge-fund manager to fight allegations stemming from the SEC’s probe of PIPE transactions, in which public companies raise cash quickly through unregistered sales.
“The essence of a PIPE transaction cuts to the underlying concerns of the SEC regarding the unregulated way that hedge funds turn quick profits,” said attorney Seth Berenzweig of Virginia.
